At the Zhuhai Airshow in China on November 12, 2024, Airbus, the European aerospace giant, staunchly defended the principles of free trade amidst escalating economic tensions that could potentially lead to new tariffs. George Xu, CEO of Airbus China, emphasized the company's commitment to free trade, stating that such practices are essential for global economic prosperity. This stance comes at a time when trade relations between the European Union and China are under strain, particularly due to disputes over electric vehicles, and with the U.S. under a new administration that has promised to impose widespread tariffs.
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Airbus has significantly expanded in China, overtaking Boeing as a supplier to Chinese airlines, partly due to a trade rift between Washington and Beijing that started during Donald Trump's previous term. This expansion includes a deep industrial engagement, with components from Chinese manufacturers being integral to all Airbus commercial jets currently in production. Xu highlighted Airbus's strategy to further integrate its supply chain within China, aiming to leverage this relationship to supply not only the Chinese market but also to serve global customers from this base.
The backdrop for Airbus's defense of free trade is a history of tariffs related to aircraft subsidies, where both Airbus and Boeing were embroiled in disputes leading to mutual tariffs between the EU and the U.S. before a five-year truce was declared in 2021. However, with the possibility of new tariffs looming, especially in light of the U.S. election outcomes, Airbus is keenly aware of the potential disruptions to its business model.
Xu's comments also reflect Airbus's interest in the ongoing discussions between Beijing and Brussels over potential EU tariffs on Chinese-made electric vehicles. Airbus, while not directly involved in this sector, understands the broader implications of trade barriers on global supply chains and market access. The company is hopeful for a resolution that would prevent the escalation of trade tensions, which could adversely affect its operations and the industry at large. Airbus's advocacy for free trade at this juncture underscores its strategic positioning in one of the world's largest aviation markets and its broader vision for global cooperation in aerospace manufacturing, where economic barriers could have ripple effects across industries and countries.